Mobile security company Location Labs is being acquired by online security firm AVG in a deal worth up to $220 million. AVG said today it will pay around $140 million initially to buy Location Labs, plus up to an additional $80 million in cash consideration over the next two years, based on certain performance metrics and milestones being met.

The acquisition is aimed at beefing up AVG’s mobile credentials, with Location Labs offering a swathe of security products for phone users — including antivirus, cloud backup plus a series of family-focused controls so that parents can, for instance, lock out phone use during school hours, view a log of phone activity, and get alerts when a phone is used for certain activities or to contact certain people. The company has also established a range of carrier partnerships in the US to promote its software.

Location Labs now has more than 1.3 million monthly paying subscribers for its mobile safety and security products. Its software has a penetration rate of 2.7 devices per household as multiple users within families are engaged with it. The company is profitable, and currently generates around $33 million in annual revenue. It has raised around $26 million in funding, with its last funding round being back in 2007.

A spokeswoman for AVG said the appeal for the company to acquire Location Lab is to expand its consumer product range, and especially to grow on mobile. The carrier partnerships and integration are also a draw for AVG. It is likely Location Lab will continue to operate independently post-acquisition, she added.

Commenting on the acquisition in a statement, AVG CEO Gary Kovacs said: “Location Labs has built a successful business model with industry partners that has effectively cracked the code for mobile monetization. This acquisition significantly accelerates AVG’s mobile strategy in this area.

“According to industry estimates, the number of mobile-connected devices will exceed the world’s population by the end of this year alone. The combined existing mobile user base of both companies gives us the unprecedented opportunity to deliver online security to approximately a quarter of a billion mobile customers and their devices over the next 12 months.”

The transaction is expected to close during the fourth quarter of 2014 and is subject to standard closing conditions, including shareholder approval.

In a classic case of acquiring a company that offers related and complementary services that can beef up a company’s offerings, antivirus company AVG Technologies has a acquired mobile location and security company Location Labs for $220 million.

Location Labs, which first focused on providing location data to developers, eventually pivoted to mobile security for Android phones, and it also offers its users granular control over their family’s devices thanks to its deep integration with mobile carriers’ networks. Location Lab’s products are white-labeled under its partner telecom carriers, and users pay between $5 and $15 for its services, which come pre-loaded on the phones.

AVG made its name in the antivirus game by providing software for an undeniable price tag: free. Although the company already provides security software for Android devices (along with PCs and Mac computers), the Location Labs acquisition will significantly expand AVG’s mobile business. The company expects to generate $60 million to $70 million in 2015 from its mobile offerings.

“Location Labs has effectively cracked the code for mobile monetization through its highly successful business model with industry partners. This acquisition significantly accelerates AVG’s mobile strategy in this area,” said AVG chief executive Gary Kovacs in a statement.

AVG already boasts more than 182 million users pre-acquisition.

The deal is expected to close during the fourth quarter of 2014, and Location Labs chief executive Tasso Roumeliotis will continue to lead the Location Labs division of AVG. For the purposes of this acquisition, AVG has secured a credit facility of up to $300 million from Morgan Stanley Senior Funding, HSBC Securities, and others.

AVG has most recently acquired Level Platforms and PrivacyChoice, among its acquisitions. Location Labs has previously raised $25.8 million in funding.

The Czech-founded, Amsterdam-based security operation AVG Technologies already has a mobile presence, with antivirus and anti-theft apps for Android, but the company is best-known for its desktop products. That may change – the firm said on Wednesday that it will shell out a whopping $220 million for U.S. mobile security company Location Labs.

Location Labs has deals with all the big U.S. carriers, and comes with over a million paying customers. AVG itself already has 182 million active users — with 85 million using its mobile apps — though the majority of those will be using its popular free products.

According to a statement, AVG expects the combined business to pull in $60 to $70 million in mobile business next year, and around $100 million in 2016, with a hoped-for combined user base of around 250 million people.

“Location Labs has effectively cracked the code for mobile monetization through its highly successful business model with industry partners,” AVG CEO Gary Kovacs said in the statement. “This acquisition significantly accelerates AVG’s mobile strategy in this area.”

Location Labs chief Tasso Roumeliotis will continue to lead his team, the companies said. AVG shareholder approval is still needed before the transaction can close – an extraordinary general meeting will take place in mid-October in Amsterdam.

AMSTERDAM and SAN FRANCISCO, Calif. (PR NEWSWIRE)—September 3, 2014—AVG® Technologies NV (NYSE: AVG), the online security company™ for 182 million active users, today announced a definitive agreement to acquire privately held Location Labs, a global leader that uses mobile technology to protect people. Location Labs has been recognized as an Inc. 500|5000 Fastest Growing Private Company for five consecutive years.

The acquisition brings AVG a proven innovative platform of personal security products for mobile devices and deep integration with global industry partners, including all four major mobile operators in the United States. Location Labs’ integrated platform for mobile operators, pre-installed service on Android smartphones, and mobile subscription services including family, safety and personal device management, are all expected to complement and expand AVG’s existing mobile offerings.

This acquisition significantly broadens AVG’s position as the online security company by accelerating its mobile security business. With the acquisition and organic growth, AVG is creating a global business that should generate $60-70 million in mobile bookings in 2015, and anticipates this scaling to around $100 million in mobile bookings in 2016.

“Location Labs has effectively cracked the code for mobile monetization through its highly successful business model with industry partners. This acquisition significantly accelerates AVG’s mobile strategy in this area,” said Gary Kovacs, Chief Executive Officer, AVG Technologies. “According to industry estimates, the number of mobile-connected devices will exceed the world’s population by the end of this year alone. The combined existing mobile user base of both companies gives us the unprecedented opportunity to deliver online security to approximately a quarter of a billion devices as we see more people go mobile to get online.”

AVG’s established mobile offerings include the popular AVG AntiVirus for Android™ app, the first security app to exceed 100 million downloads on Google Play™. With AVG Zen™, an application for Windows® PCs and Android™ smartphones and tablets that launched earlier this year, AVG is directly addressing the challenges consumers face today in retaining control over their privacy, protection, and performance in a world increasingly dominated by the Internet of Things. Combining the strengths of both product portfolios will create a comprehensive consumer mobile business that will help give customers a safer, simpler and more meaningful connected experience.

“Location Labs has differentiated itself through building a valued partnership model for mobile operators. Adding AVG’s proven mobile products to our own services and products will significantly enhance the innovation and support we can provide to our partners and to additional markets worldwide,” said Tasso Roumeliotis, Founder and Chief Executive Officer of Location Labs.

Following the close of the acquisition, Location Labs CEO, Tasso Roumeliotis, will continue to lead the Location Labs business.

Transaction Terms and Financials

- Under the terms of the agreement, AVG will pay approximately $140 million initially, plus up to an additional approximately $80 million in cash consideration over the next two years based on the achievement of certain performance metrics and milestones.

- AVG expects the transaction to be neutral to EPS in 2015.

- The transaction is expected to close during the fourth quarter of 2014 and is subject to customary closing conditions, including AVG shareholder approval.

- The transaction is subject to AVG shareholder approval at an Extraordinary General Meeting (“EGM”) and AVG’s Supervisory Board and Board of Management (the “AVG Boards”) will convene the EGM today. The EGM will be held on 14 October 2014 at 09:30 a.m. CET, at the offices of Allen & Overy LLP, Apollolaan 15, 1077 AB Amsterdam in the Netherlands. The AVG Boards, taking into account the interests of shareholders and other stakeholders, have approved and recommended the transaction.

- In connection with the transaction, AVG has obtained commitments for senior secured credit facilities in the amount of up to USD 300 million as described in a separate release issued today.

About AVG Technologies (NYSE: AVG)AVG is the online security company providing leading software and services to secure devices, data and people. AVG has over 182 million active users, as of June 30, 2014, using AVG’s products and services including Internet security, performance optimization, and personal privacy and identity protection. By choosing AVG’s products, users become part of a trusted global community that engages directly with AVG to provide feedback and offer mutual support to other customers.

AVG Technologies said Wednesday it is buying privately held mobile security firm Location Labs for $140 million up front, plus as much as $80 million over the next two years.

AVG is looking to the deal to boost its mobile efforts, with Location Labs bringing both relationships with carriers as well as well-established family-locator and safe-driving apps.

“Location Labs has industry-leading technology, and established and deep partnerships with each of the four major U.S. operators — plus others globally,” AVG chief executive Gary Kovacs told Re/code. “This is an important route to market. Most important is that it is an established revenue model, and growing … something that is rare in mobile.”

Kovacs said AVG will be able to build on its base of 182 million users — including 82 million mobile users — to expand Location Labs’ business. All told, AVG says it expects $60 million to $70 million in mobile revenue for 2015 and $100 million the following year.

The space has been heating up with mobile security specialist Lookout recently raising $150 million in additional funding.

The Location Labs deal requires approval of AVG’s shareholders and is expected to close in the fourth quarter of the year and be neutral to next year’s per-share earnings, AVG said. Current Location Labs CEO Tasso Roumeliotis will join AVG and lead that unit’s business.

AVG Technologies, the company behind the popular AVG security platform, has agreed to acquire Location Labs for up to $220 million, the companies announced Wednesday.

Location Labs has carved out a distinctive niche in mobile security. While many companies, including AVG, offer anti-malware platforms running on Android and iOS, Location Labs focuses on products that determine when, where, and how a phone gets used. The company’s Phone Controls product, for instance, lets users see all activity on a device, as well as automatically locks it when kids are at school or shouldn’t be online. It also includes an alerts function that tells users of questionable activities.

Beyond that, Location Labs has an automatic phone-locking product that recognizes when a device is moving and stops users from texting or doing hardly anything other than dialing 911 while driving. Location also offers a mobile-analytics platform, called Sparkle.

While AVG remained tight-lipped on its exact plans for Location Labs, it noted that the deal will aid its growth in mobile security. AVG says it has registered over 100 million downloads of its Android security app, and that figure continues to grow.

“AVG is acquiring Location Labs to accelerate its mobile monetization strategy, to innovate further on our existing products and develop new ones; to increase our user base by delivering online security for device, data and people; and to open up new avenues for revenue and success,” the company told CNET in a statement Wednesday.

The terms of the deal between the companies allows for AVG to pay $140 million in cash once the acquisition closes. If Location Labs hits certain performance metrics, the company can earn another $80 million over the next two years.

The deal between AVG and Location Labs is subject to customary closing conditions and will likely close in the fourth quarter of 2014. Location Labs CEO Tasso Roumeliotis will head up Location Labs after acquisition.

AVG TechnologiesAVG +0.23% NV agreed to acquire privately held Location Labs in a deal that is potentially valued at $220 million and expected to broaden its offerings of security products for mobile devices.

Under the deal, expected to close during the fourth quarter, online security company AVG will make an upfront payment of about $140 million and another $80 million in milestone-based payments over the next two years.

AVG, which launched as a publicly traded company in February 2012, sells Internet security, personal-computer performance optimization and online backup products, as well as products for mobile devices.

Location Labs has a platform of personal security products for mobile devices and industry partnerships, including all four major mobile operators in U.S. The company’s platform for mobile operators, pre-installed service on Android smartphones, and mobile subscription services are expected to complement and expand AVG’s mobile offerings.

AVG Technologies has agreed to buy Location Labs in a deal valued at up to $220 million, which the Dutch online security company said will boost its protection of mobile devices.

Emeryville-based Location Labs, led by CEO Tasso Roumeliotis, brings to AVG an integrated platform for mobile operators, a pre-installed service on Android smartphones and a set of mobile subscription services including family, safety and personal device management.

It made the Inc. 5000 list of fastest growing private companies for the past five years, ranking No. 4,577 in the most recent list. Revenue grew by 56 percent at the 214-employees company between 2010 and 2013, when it brought in $27.3 million.

The company had raised nearly $26 million since it was founded in 2002 and was backed by Draper Fisher Jurvetson, Intel Capital, Qualcomm Ventures, BlueRun Ventures, Mitsui & Co., British Telecom, Saturn Partners and Second Avenue Partners.

AVG, which is based in Amsterdam but has North American headquarters in San Francisco, said it sees its global mobile security business growing to between $60 million and $70 million in mobile bookings in 2015, and anticipates scaling to around $100 million in mobile bookings by 2016.

“The combined existing mobile user base of both companies gives us the unprecedented opportunity to deliver online security to approximately a quarter of a billion devices as we see more people go mobile to get online,” AVG CEO Gary Kovacs said in the announcement of the deal.

Location Labs CEO Roumeliotis will continue to lead his company as a unit of AVG.

The deal calls for AVG to pay $140 million up front for Location Labs and pay up to $80 million more over the next two years.

Location Labs, which bills itself as a provider of ‘security for humans,” offers a mobile device management platform for consumers and the enterprise. The California-based company has been recognized as an Inc. 500/5000 Fastest Growing Private Company for the past five years.

The antivirus vendor says the acquisition will “significantly broaden” AVG’s position as an online security provider, and will accelerate the growth of its mobile security division. In addition, by taking on Location Labs and its portfolio, AVG says the company will have access to valuable personal security products and potentially new partnerships with all four major mobile operators in the United States.

“Location Labs’ integrated platform for mobile operators, pre-installed service on Android smartphones, and mobile subscription services including family, safety and personal device management, are all expected to complement and expand AVG’s existing mobile offerings,” the company says.

Under the terms of the agreement, AVG will pay approximately $140 million upfront, in addition to approximately $80 million in cash over the next two years based on performance levels and targets.

“Location Labs has effectively cracked the code for mobile monetization through its highly successful business model with industry partners. This acquisition significantly accelerates AVG’s mobile strategy in this area. According to industry estimates, the number of mobile-connected devices will exceed the world’s population by the end of this year alone.

The combined existing mobile user base of both companies gives us the unprecedented opportunity to deliver online security to approximately a quarter of a billion devices as we see more people go mobile to get online.”

AVG’s current mobile security offerings include AVG AntiVirus for Android and AVG Zen, an application for both Windows PCs and Android mobile devices.

The acquisition is subject to shareholder approval, and if accepted, the deal is expected to close during the fourth quarter of 2014.

In related news, AVG announced on Wednesday the firm has entered into a commitment letter with Morgan Stanley Senior Funding for senior secured credit facilities to raise up to $300 million.

Under the terms of the agreement, two loans — one of $250 million and another of $50 million — will be paid back over six and five years respectively. AVG says the main portion of the loan will be used to acquire Location Labs, while the rest of the funds will be used for general corporate purposes and “future potential acquisitions.”

]]>http://www.locationlabs.com/avg-secures-credit-acquires-mobile-security-firm-location-labs/feed/0Location Labs Is a Stevie® Award Finalisthttp://www.locationlabs.com/location-labs-is-a-stevie-award-finalist/
http://www.locationlabs.com/location-labs-is-a-stevie-award-finalist/#commentsTue, 05 Aug 2014 19:53:15 +0000Joanna Chenghttp://www.locationlabs.com/?p=4494Read more »]]>EMERYVILLE, Calif.—September, 12, 2014—Location Labs has been selected as a 2014 Stevie® Award Finalist by the American Business Awards, for its Verizon FamilyBase™ mobile service. The American Business Awards is the leading awards program in the US and honors the achievements of organizations and professionals worldwide.

Location Labs built the Verizon FamilyBase insights and controls service, giving users the most comprehensive analysis and control of family phone activity available. Beyond being able to see all texting, app and phone call activity, parents are informed about activities like children texting late at night, playing games while at school or receiving calls from unknown contacts. Parents now have the ability to facilitate smart, responsible cell phone use and to protect against overages by launching an application on their phone.

Stevie Award nominees are judged by a committee of senior industry executives and experts from across the nation whose scores determine the merits of the Finalists’ claims of innovation and growth. Location Lab was selected as a finalist from more than 3,300 nominations from organizations of all sizes and in virtually every industry.

About the Stevie AwardsStevie Awards are conferred in five programs: The American Business Awards, The International Business Awards, the Asia-Pacific Stevie Awards, the Stevie Awards for Women in Business, and the Stevie Awards for Sales & Customer Service. A sixth program, the German Stevie Awards, will debut later this year. Honoring organizations of all types and sizes and the people behind them, the Stevies recognize outstanding performances in the workplace worldwide. Learn more about the Stevie Awards at www.StevieAwards.com.